GST on Animal Husbandry — Live Animals Nil, Meat Nil/12%, Feed Exempt

POULTRY FARMER GST — COMPLETE GUIDE: LIVE CHICKENS: Sale of live broiler chickens (to trader/wholesale): Nil GST. Sale of live layer birds (end-of-lay, to market): Nil. Sale of live chicks (day-old chicks — DOC): Nil. Sale of breeding birds: Nil. ALL live poultry: Nil — regardless of quantity, value, or buyer. EGGS: Fresh eggs (table eggs — brown or white): Nil. Hatching eggs (fertilized, sold to hatcheries): Nil. Egg powder (spray-dried): 5%. Liquid egg (pasteurized): 5%. DRESSED CHICKEN (slaughtered, cleaned): Fresh dressed chicken (whole/cut pieces — sold to shop/consumer): Nil. Frozen chicken (raw, unprocessed — just frozen): Nil. Marinated/seasoned chicken (with spices, ready to cook): 12% (processed — Chapter 16). Chicken sausages/nuggets: 12%. REGISTRATION REQUIREMENT: If your TOTAL turnover (all activities) is BELOW ₹20 lakh: NO GST registration required. Most small poultry farmers: exempt from registration. If turnover exceeds ₹20 lakh: must register BUT output is Nil (no tax to pay). Then why register? ITC on inputs (feed, medicines) is NOT available anyway (output is Nil). So: registration is optional for most poultry farmers. WHEN REGISTRATION HELPS: If you sell processed products (12% items like sausages): register to claim ITC. If you provide services (contract farming): may need registration. If you export live poultry/eggs: register to claim refund of input taxes. INPUT COSTS (NO ITC AVAILABLE — because output is Nil): Poultry feed: Nil (no GST to claim ITC on). Medicines/vaccines: 5-12% — ITC NOT available (Nil output = blocked ITC). Electricity: outside GST — no ITC. Shed construction: 12-18% — ITC NOT available. Equipment (feeders, drinkers, fans): 18% — ITC NOT available. This is the COST BURDEN: poultry farmer pays 18% on equipment, 12% on medicines — CANNOT recover. Adds 3-5% to cost of production. Industry has demanded ITC refund mechanism — not yet provided.

DAIRY FARMING GST — FULL CHAIN: STAGE 1 — FARMER (Milk production): Cow/buffalo milk production: NOT a supply under GST (primary agricultural activity). Farmer selling milk to cooperative/private dairy: Nil. Farmer selling directly to consumer: Nil. No registration required for dairy farmers. STAGE 2 — MILK COLLECTION (Cooperative/Agent): Village-level milk collection: Nil (purchase of agricultural produce). Chilling (cooling from 37°C to 4°C): part of collection — NOT a separate taxable service. Transportation to processing plant: EXEMPT (transport of agricultural produce by GTA). Milk testing (fat/SNF): EXEMPT if part of collection process. Cooperative society operations: Most cooperative activities related to agricultural produce: EXEMPT. STAGE 3 — PROCESSING PLANT: PRODUCT CLASSIFICATION: Raw milk (pasteurized, standardized, toned): Nil. Curd (plain, natural): Nil. Buttermilk / lassi: Nil. Paneer (fresh): Nil (if loose/unbranded or branded but not pre-packaged). UHT milk (tetra pack, long life): Nil (it's still 'milk' — just sterilized). Flavored milk (chocolate milk, badam milk): 12% (addition of flavoring = processed). Ghee: 12%. Butter: 12%. Cheese (all types — cheddar, mozzarella, paneer blocks): 12%. Cream: 12%. Milk powder (SMP, WMP): 18% (dried — significant processing). Condensed milk (Milkmaid): 18%. Ice cream: 18%. Whey protein powder: 18%. Casein: 18%. Skimmed milk powder (SMP): 18%. BRANDED vs UNBRANDED (Post-July 2022 changes): Pre-packaged & labeled curd (Amul, Mother Dairy): 5% (earlier Nil). Pre-packaged lassi: 5%. Pre-packaged paneer: 5%. Loose (unpackaged) curd/lassi/paneer: Nil (unchanged). This affects: Amul, Mother Dairy, Nandini — their packaged products now carry 5%. Small dairy shops selling loose: still Nil. ITC CHAIN FOR DAIRY PROCESSOR: Inputs: packaging material (18%), machinery (18%), fuel (outside GST), electricity (outside GST). Output: mostly Nil or 5% or 12%. RESULT: Inverted duty structure. ITC accumulation with limited utilization. Refund available only for export or where inverted duty refund is permitted. BIG DAIRY COMPANIES (Amul, Mother Dairy, Britannia): Maintain separate accounts for Nil/5%/12%/18% products. ITC apportionment (Rule 42): based on taxable vs exempt turnover ratio. Complex compliance — dedicated GST teams required.

ANIMAL BREEDING & VET SERVICES — MOSTLY EXEMPT: ARTIFICIAL INSEMINATION (AI): AI service by government center: EXEMPT (government service). AI service by private technician: EXEMPT (agricultural service — Notification 12/2017, Entry 54A). AI of cattle (cow/buffalo): EXEMPT. AI of sheep/goat: EXEMPT. AI of pig: EXEMPT. AI of horse (thoroughbred): EXEMPT (still agricultural — breeding). SEMEN/GENETIC MATERIAL: Bull semen (frozen straws): Nil GST (specific exemption). Semen of other animals: Nil. Embryo (for transfer): Nil. Ova/eggs for transplant: Nil. Genetic evaluation/testing service: 18% (lab service — not agricultural). DNA testing of livestock: 18% (scientific testing). BUT: progeny testing programs (government): EXEMPT. VETERINARY HOSPITALS/CLINICS: Government veterinary hospital (free service): EXEMPT. Government-aided vet clinic: EXEMPT. Private veterinary clinic/hospital: EXEMPT (healthcare service). Veterinarian consultation fee: EXEMPT. Surgery/operation on animal: EXEMPT. Hospitalization of animal: EXEMPT. Diagnostic tests (blood, urine, X-ray): EXEMPT if done at vet hospital. Private diagnostic lab (commercial): 18% (if standalone lab, not part of clinic). MEDICINES SOLD AT VET CLINIC: If vet provides medicine AS PART OF TREATMENT (composite supply): EXEMPT (principal supply is healthcare). If vet SELLS medicine separately (retail): 5-12% GST (pharma rates apply). Most vets: don't charge GST on medicines given during treatment — covered under exempt healthcare. PET CLINICS — DIFFERENT TREATMENT: Pet clinic services (dog, cat treatment): EXEMPT (still healthcare services — notification doesn't distinguish farm vs pet). Pet surgery: EXEMPT. Pet vaccination: EXEMPT. Pet boarding/hostel: 18% (hospitality service — not healthcare). Pet grooming: 18% (beauty service). Pet training: 18% (training service). IMPORTANT: The exemption for veterinary services applies to ALL animals — farm and pet. But: related non-medical services for pets (grooming, boarding, training) are taxable at 18%.

CONTRACT FARMING & INTEGRATED OPERATIONS — GST ANALYSIS: CONTRACT FARMING MODEL: Integrator (company) provides: day-old chicks, feed, medicines, technical guidance. Farmer provides: land, shed, labor, electricity. Farmer rears birds for 35-42 days → returns grown birds to integrator. Farmer receives: 'growing charges' (per bird or per kg). GST ON GROWING CHARGES: EXEMPT — classified as 'agricultural service' (rearing of animals). Notification 12/2017, Entry 54: 'Services relating to cultivation of plants and rearing of all life forms of animals'. Growing charges = service of rearing → EXEMPT. No GST registration required for farmer (exempt output). INTEGRATOR'S GST POSITION: Integrator sells: processed chicken (Nil if fresh, 12% if processed). Integrator buys: DOC from hatchery (Nil), feed (Nil), medicines (5-12%). Integrator provides to farmer: chicks + feed + medicines = supply of goods? NO — it's 'supply for growing' (no transfer of ownership to farmer). Chicks remain integrator's property throughout. So: no supply to farmer = no GST on material given to farmer. INTEGRATED DAIRY OPERATIONS: Company owns cattle → produces milk → processes → sells: Output (fresh milk): Nil. Output (ghee, butter, cheese): 12%. Output (powder, ice cream): 18%. Contract dairy farming (company cattle, farmer's land): Growing charges to farmer: EXEMPT (agricultural service). Milk collection from farmer: Nil (purchase of agricultural produce). ISSUES & DISPUTES: (1) 'Growing charges' vs 'job work': If classified as 'job work on goods' (manufacturing): 12% or 18% GST. If classified as 'agricultural service' (rearing): EXEMPT. KEY: the farmer must be REARING LIVE ANIMALS (not processing goods). Live bird rearing: agricultural service → EXEMPT. Meat processing (cutting, packaging): job work → 18%. (2) Corporate farming (company-owned farms): If company farms its own land with own labor: not a 'service' — it's own business. Output (eggs, milk, meat): taxed per product rates. No 'agricultural service' exemption (you can't provide service to yourself). (3) Hatchery operations: Selling day-old chicks (DOC): Nil (live poultry). Hatching eggs: Nil. Custom hatching service (farmer gives eggs, hatchery hatches): Debate — EXEMPT (agricultural service) vs 18% (processing service). Most: treated as agricultural service → EXEMPT. (4) Feed manufacturing for own integration: Integrator manufacturing feed for own farms: no GST (self-supply, captive use). Integrator selling feed to third parties: Nil (animal feed exempt). ITC on feed manufacturing inputs: NOT available (output is Nil/exempt).